Bring your Air Conditioner into the 21st century: Interview with Julian Lee, CEO of Ambi Labs

Ambi Labs is a Hong Kong startup that is changing how Asian consumers interact with household appliances. Their product, Ambi Climate, is a simple system that automatically sets your AC to the perfect temperature, provides insights on your AC usage for energy savings and enables smartphone AC control. They got The People’s Choice Award at tech conference Echelon 2014. Fortunately, I Interviewed Julian Lee, CEO of Ambi Labs.

1) Nowadays, there are some hardware startups that have developed Intelligent AC control. For instance, Tado. What do you think about Ambi Climate’s greatest strength?

Great question! Tado solves quite a different problem from us – they are focused on helping the user switch the AC on before they go home, and off when they go out. However, we have found that this isn’t a big problem in Asia, since our research shows that people only forget to switch off their AC around once a year or less.

Also, cities in Asia can be quite dense, with people sometimes living, working and having fun in the same district. With such characteristics the risk of the system wrongly switching on the AC and increasing the electricity bill is quite high. Users have told us very clearly that this would be unacceptable.

Since ACs are used in Asia only when they are needed, the problem that we solve is this: As seasons and outdoor conditions change, the AC settings required for comfort also vary. However, as this can change on a daily basis (or sometimes several times a day), users often find this very troublesome. They tend to just use a few settings and then control things by the power switch alone, switching the AC on when they are hot and off again when they are cold – in our survey, around 30% of users do this. This results in overcooling and wasted energy.

Ambi Climate automatically adjusts the AC to maintain your comfort and saves you energy. Our closest competitor would be Sensibo, an Israeli startup, and the key differentiator between us is in two areas:

a) Sensibo uses a measure called “PMV”, which has been around since the 1970s – there are several Japanese AC manufacturers who also use PMV control. We use Humidex which according to some recent studies is a better predictor of indoor comfort. We also have a patent pending algorithm that predicts how conditions in your room will change before it happens. This allows us to preemptively make changes before you feel uncomfortable.

b) Sensibo is installed by sticking it onto the AC, while we are a device that you place on your bookshelf or under your TV. As many people in Asia rent, we find many are reluctant to install things even if they are semi-permanent

2) Why do you focus on Southeast Asia? I mean, why have you launched your campaign on a new Singapore-based platform? （※ They are planning on relaunching Kickstarter about the end of August.）

We are focused on the whole of Asia, not just SE Asia. Unfortunately, as of right now there are no pan-Asian crowdfunding platforms. Crowdtivate is a new platform backed by Starhub from Singapore that is seeking to target a wider Asian audience, partly by partnering with other Telcos in the region, e.g. Indosat in Indonesia. Through this, we hope to attract a wider Asian audience.

We are also publicising our campaign by attending a series of events in the region, including TechCrunch Beijing and StartupAsia Tokyo.

3) Do you have a plan to place emphasis on the Japanese market?

We are very interested in engaging with the Japanese market, as part of our designs were inspired by cool Japanese tech we have seen. The industrial designer is actually a Japanese designer living in Kyoto called O-lab. We hope to make good contacts at StartupAsia Tokyo to push this to a greater awareness in Japan.

4) What is an attractive point of Hong Kong to you? I know there are some advantages of the tax system and financial ecosystem in HK. On the other hand, companies based in Shenzhen is more convenient to do prototyping in spite of specific regulation. Why are you based in HK?

We find that HK has a mix of great factors. For example, as a more international city, we are able to recruit people with a wider range of experiences and skillsets. Our team is very diverse, with colleagues from the UK, Singapore, US, HK, Switzerland and Canada, and we also have a new colleague from Japan who will join us in the next few weeks. We believe that this mix of backgrounds and experiences can help us understand our customers better. HK is such a small market that we feel we need to address concerns that go across national and cultural boundaries.

Separately, HK still enjoys many of the benefits of Shenzhen. We are able to rapidly prototype, and find Shenzhen suppliers and factories, and there is also a base of HK talent who know how to effectively manage Chinese suppliers for international quality standards – we know enough startups who have gone direct to China, and have not had their product turn out at a good quality. HK is also a great logistics hub, which makes it easy to send goods from HK to virtually anywhere in the world. HK drop-shippers here have great services, giving us both low cost and high standard service.

Lastly, we have benefitted strongly from the excellent HK startup community. Although the community may not be as large as in some other places, it is very friendly, with many startups helping each other out and sharing knowledge, connections and resources so that everyone can benefit together.

5) What do you think about hardware startup incubators? In these days, many hardware startups join the programs. Actually, they de-risk hardware and have access to manufacturing, design, financial ecosystem and etc. But in your case you researched the market and develop new product yourselves. Why did you choose the way?

I think hardware startup incubators are a great idea – as you said, they help to reduce the risk of hardware manufacturing. However, my view is that similar to some software incubators, the pressure is very high to deliver something quickly – this means that sometimes the level of innovation in a product may need to be lower so that the deadlines can be met. For us, since our system combines hardware and machine learning (which requires a lot of data), I think it would have been hard for us to go with an incubator.

We spent about 9 months trying to understand the market and iterating on our concept quickly, before we settled on our current concept. Since then, we’ve spent 15 months doing underlying infrastructure work, so that we could obtain and analyze the data to build our models. While we do think we could have been more “lean” in our approach, we probably wouldn’t have been able to develop our product in the 3 month timeframe that hardware incubators seem to be adopting.

Thanks for reading till the end! I write tech articles on the Japanese online media such as The Huffington Post, TechCrunch and Business Journal. Most of articles are in Japanese and a few of them are in English.

In this blog, Build Something, I specialize in hardware startups coverage of wearable device, drone, home automation and etc. If you are interested in Japanese market, I’m sure I could be of some assistance. Feel free to contact me through Twitter or Facebook, LinkedIn.